Post Session: Quick Review

Snapping two sessions’ losing streak, benchmark equity indices negotiated flat yet positive close due to emergence of lower-level buying in the dying hours of the trade amid the mostly positive global set-up. Despite the positive close, the session turned out to be largely disappointing one, as benchmarks squandering all the early gains settled only a little above its day’s low. Rupee depreciation to record low level hurted the investor’s sentiment, however, this turned out to be largely positive for Technology firm stocks, which derive lion share of their revenue in foreign currency. Escalating worries over about the current account deficit and complicating the task for policy makers looking to revive an economy that grew at its slowest in a decade in 2012/13, Indian currency depreciated past ‘57.50/$’ level. Thus, by the close of trade, benchmark indexes, Sensex and Nifty, adding a little over 0.10% ended past psychological 19450 and 5850 levels respectively. However, the session turned out to far taxing for broader indices, which went home with a cut of over half a percent.

On the global front, Asian stocks rose, with the regional benchmark index heading for the biggest rally in more than six weeks, after a report showed that the US added more workers than expected. Japanese shares surged after a three-week, $600 billion rout. Stocks rose after Japan revised up its first-quarter growth and the Prime Minister Shinzo Abe said the government will unveil its second growth strategy after the upper house election next month. Meanwhile, European shares traded slightly higher on Monday following a rebound in Japan's benchmark Nikkei on the back of a strong Japanese gross domestic product (GDP) revision and a weaker yen.

Closer home, benchmarks failed to hold on to intraday gains and slipped in the negative terrain on Monday as profit booking picked up in Consumer Durables, Realty and banking counters turned out to be top losers of the session. Amongst the Consumer Durable pivotal, stocks of Rajesh Exports, Gitanjali Gems and Titan Industries fell after Chief Economic Advisor Raghuram Rajan, within days of hiking import duty on gold, said that government could take more steps to curb demand for the gold amidst widening current account deficit (CAD). On the flip side, besides IT, Oil & Gas and Fast Moving Consumer Goods counter witnessed maximum traction.  IT companies gained momentum in a range-bound market as the depreciating rupee raised hopes of better operating profit margins for these companies. While, stocks related to FMCG space rallied on arrival of early monsoons. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 905: 1404, while 133 scrips remained unchanged. (Provisional)

The BSE Sensex gained 30.49 points or 0.16% to settle at 19459.72.The index touched a high and a low of 19585.75 and 19366.82 respectively. Among the 30-share Sensex pack, 14 stocks gained, while 15 stocks declined and 1 remained unchanged. (Provisional) 

The BSE Mid cap and Small cap indices ended lower by 0.78% and 0.70% respectively. (Provisional)

On the BSE Sectoral front, Teck up by 0.47%, FMCG up by 0.20% and Oil & Gas up by 0.19% were the only gainers, while Consumer Durables down by 1.97%, Realty down by 1.35%, Bankex down by 0.94%, Health Care down by 0.90% and Metal down by 0.75% were the top losers. (Provisional)

The top gainers on the Sensex were Wipro up by 1.94%, NTPC up by 1.82%, HDFC up by 1.80%, Infosys up by 1.60% and Bajaj Auto up by 1.44%. While, Jindal Steel down by 4.67%, BHEL down by 2.92%, Maruti Suzuki down by 2.09%, ICICI Bank down by 1.99% and Tata Motors down by 1.46% were the top losers in the index. (Provisional)

Meanwhile, concerned over the fall in rupee value to lifetime low of over 57.50 against dollar, the finance ministry said that there is an unwarranted panic in the market and will settle down in some time. Raghuram Rajan, chief economic adviser at the finance ministry has said the weakness in rupee could be a temporary phenomenon and the government will continue to take measures to curb the current account deficit and does not want the rupee to be volatile.

Furthermore, Economic Affairs Secretary Arvind Mayaram said that presently, dollar is appreciating against all the currencies across the world and the rupee has not weakened as much as some of its peers. The central bank also stated that it will do everything to turn down the volatility, but will not disclose its strategy. The RBI has forex reserves of over USD 290 billion to deal with the situation on the external sector.

The rupee is depreciating mainly due to the high CAD, which widened due to rising gold import and high crude oil prices. Further, persistent dollar demand from importers and banks also added to the fall in rupee value. In May, India’s gold imports touched 162 tonnes, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. While, the CAD widened to a record high of 6.7% in the third quarter of FY13.

India VIX, a gauge for markets short term expectation of volatility gained 4.38% at 18.11 from its previous close of 17.35 on Friday. (Provisional)

The CNX Nifty gained 9.20 points or 0.16% to settle at 5,890.20. The index touched high and low of 5,931.65 and 5,857.40 respectively. 19 stocks advanced against 31 declining on the index. (Provisional)

The top gainers on the Nifty were HDFC up by 1.95%, NTPC up by 1.76%, Infosys up by 1.71%, Bajaj-Auto up by 1.69% and HCL Tech up by 1.65%

On the other hand, Jindal Steel down by 4.19%, BPCL down by 2.51%, BHEL down by 2.46%, IndusInd Bank down by 2.16% and IDFC down by 2.14%.

The European markets were trading in green; Germany’s DAX up by 0.90% and the United Kingdom’s FTSE 100 up by 1.30% while France’s CAC 40 down by 0.01%.